The Inside-Out Approach to Digital Transformation: Shift Culture by Starting with Your Own Shared Services Groups
For many enterprises undergoing a digital transformation, the reasons are usually centered around the customer or end-user — improving their online shopping experience, the ease of interfacing with their company online, or giving them a best-in-class, personalized app experience.
However, this leads many organizations to think of digital transformation as only a customer-facing exercise. Ultimately, it’s about increased revenue and brand love, but the parts of the business that are not customer-facing can sometimes be left behind.
But a transformation is not just about the revenue-generating parts of your business. It has to go end-to-end, turning your whole organization into a digital-first operation. If any departments or functions are left behind, the transformation is incomplete, and may even be ineffective.
It’s a commonsense approach to start a transformation with the parts of your business that pay — sales, marketing, product, user experience and design — and then scale the efforts to internal-facing teams. But what if you did it the other way around?
Transformation from the inside
Any senior executive who has led a digital transformation effort will tell you: Shifting internal culture is the hardest part. Making changes to technology and tooling is easy — it can even be plug-and-play for the most part in our cloud-centric era. But changing minds, attitudes, and changing ways of working is a much longer process. There are no shortcuts, and there are often few tried-and-true methods of achieving culture change, at least in the short term.
If you need to convince your employees of the value of a digital transformation, consider showing them the value it can have for them personally, and doing it first.
In other words, start your digital transformation in your shared services functions: Human Resources, Talent Acquisition, Finance and Operations.
Transforming these functions will not directly affect your bottom line (at least not by next quarter). The transformation won’t make headlines, and you won’t bring a cutting-edge new experience to market.
But what you will do is prepare your employees and your internal culture for the transformation journey ahead. You’ll show them the true value of transformation, so that they can be ready to share this value with your customers. The shared services transformation will pay in job satisfaction, employee engagement, and commitment to the future of your business.
The war for talent
Most digital businesses emerging from the effects of the pandemic are struggling to attract and retain new employees. Competing on salary and benefits can be a losing game for mid-tier enterprises, but these organizations can compete on employee experience. Moreover, your leaders in HR and Talent Acquisition are incentivized to make the new remote work onboarding experience as smooth as possible, and likely have many ideas for how they can affect positive culture change in this area.
Consider that for every employee you onboard, the costs of doing so add up to about 20-30% of that employee’s baseline salary. If your company is facing high turnover and never seems to get off the hiring merry-go-round, those costs can become a major drain on resources. On the flip side, if you can improve engagement and retention by making digitally-savvy changes to your employee experience, the cost savings can be in the millions.
Shared Services are often overlooked as critical functions in an enterprise organization looking to take on a digital transformation. In the rush to think “customer-centric” many execs forget that employees are the internal customers of the organization. Shared services departments have customers: Their mandate is to serve the employees of the enterprise. If they can shift to a digital-first mindset in order to deliver value to employees, then everyone in the organization can experience the value of digital transformation first hand.
Priorities and outcomes
Recent research from Gartner states that “Eighty-seven percent of senior business leaders say digitalization is a company priority, yet only 40% of organizations have brought digital initiatives to scale.” Clearly, getting buy-in for digital initiatives across the organization is a challenge. As we’ve stated before, if your organization’s goals and objectives can be accomplished in the absence of a digital transformation, then your leadership has no incentive to transform. If your shared services functions create goals that can only be accomplished with digital transformation, you will see changes ripple throughout your organization. Seeing the value of a digital transformation by experiencing it in the day-to-day work environment is a powerful way to send a message within your company: Digital transformation is coming, and it’s going to make the way we work better.
If your digital transformation is lagging, consider refreshing your perspective. Your employees deserve an experience that matches the experience they deliver to your customers every day. An inside-out transformation prepares your culture for the challenges of digital transformation by giving them the rewards first.